Read the motion for attorneys' fees.

 Read Judge Wilson's opinion.

CHARLESTON, W.Va. -- Almost a year after West Virginia Attorney General Darrell McGraw announced a multimillion-dollar settlement with two major credit card companies, a judge has approved almost $4 million in attorneys' fees for the lawyers appointed by McGraw to handle the massive case.

In an opinion released Dec. 29, Circuit Judge Ron Wilson wrote that the attorneys provided a valuable service to the citizens of West Virginia in securing $12.2 million from MasterCard and Visa.

The $3.9 million of attorneys' fees is on top of the negotiated settlement, meaning that the attorneys were not cutting into the state's funds, Wilson wrote.

"West Virginians need to understand that we need to provide lawyers with a sufficient incentive to take cases like this to advocate zealously for our interest," the opinion reads. "When they obtain benefits for us, they need to be adequately compensated. If not, we will no longer have the most qualified attorneys representing us in these important cases."

While the standard rate for attorneys fees is generally 33 to 40 percent, the attorneys in this case - including Teresa Toriseva, Guy Bucci, George Sampson, Jonathan Cuneo, Daniel Cohen and Barry Hill - agreed to take less than 25 percent for their share, Wilson noted.

"These attorneys who have achieved this benefit for our citizens are entitled to the compensation normally awarded to those in our society who distinguish themselves in the work they perform," Wilson wrote. "[L]arge fees are a necessary and effective tool to deter wrongdoers. Collective action on behalf of large numbers of people is the only method of protecting consumers and making offenders pay when the value of each victim's claim is not large enough to cover the cost of litigation."

Wilson's decision drew criticism from Steve Cohen, executive director of the group West Virginia Citizens Against Lawsuit Abuse, a self-styled watchdog group that has targeted McGraw.

"Ultimately, he gave McGraw's hires their multimillion-dollar fee without any accountability," Cohen said. "The people of West Virginia are entitled to know what work contractors to Darrell McGraw did to earn $3.9 million. That's the issue."

Cohen claimed that McGraw using attorneys who had contributed to his re-election campaign to handle cases creates the appearance of "pay-to-play" - similar to the allegations surrounding Gov. Rod Blagojevich, D-Ill., - by putting the special assistant attorneys general in line to collect large fees from expensive cases.

"Judge Wilson's refusal to hold the attorney general and the private lawyers he hired accountable is just another example of the cozy good-old-boy network that holds West Virginia back," he said.

In August, Cohen appeared in Wilson's courtroom to voice his organization's objections to the proposed attorneys' fees. He demanded that the attorneys document the hours they worked, as well as their expenses, and suggested that their payment be pro-rated based on an hourly rate.

Although Cohen is not an attorney and has no standing in the case, Wilson acknowledged his objections in his opinion.

"Mr. Cohen is not a lawyer. Although he may have a few good ideas, he could not offer helpful legal arguments," Wilson wrote. "Most of his recommendations had to be rejected outright and, to the extent that I had the authority to act upon some, I ultimately found his requests to be without merit."

Lawyers in civil lawsuits usually work on a contingency basis, meaning they are not paid on an hourly basis, Wilson wrote. Instead, they are paid only if their clients receive money, and stand to lose any money they have put into expenses if they lose the case.

"In truth, and probably because he is employed by an organization that seems entirely too partisan when addressing any issue involving plaintiff's lawyers, [Cohen's] bias towards the Attorney General is so visible that it clouds his effort to deploy persuasive reasoning," Wilson wrote.

"It's too bad that Mr. Cohen's organization is so mean-spirited in its criticism of our legal system and its lawyers and judges, because it renders the nature of those claims more like an antagonistic ideology rather than a rational and substantive critique."

 Read the motion for attorneys' fees.

 Read Judge Wilson's opinion.

CHARLESTON, W.Va. -- Almost a year after West Virginia Attorney General Darrell McGraw announced a multimillion-dollar settlement with two major credit card companies, a judge has approved almost $4 million in attorneys' fees for the lawyers appointed by McGraw to handle the massive case.

In an opinion released Dec. 29, Circuit Judge Ron Wilson wrote that the attorneys provided a valuable service to the citizens of West Virginia in securing $12.2 million from MasterCard and Visa.

The $3.9 million of attorneys' fees is on top of the negotiated settlement, meaning that the attorneys were not cutting into the state's funds, Wilson wrote.

"West Virginians need to understand that we need to provide lawyers with a sufficient incentive to take cases like this to advocate zealously for our interest," the opinion reads. "When they obtain benefits for us, they need to be adequately compensated. If not, we will no longer have the most qualified attorneys representing us in these important cases."

While the standard rate for attorneys fees is generally 33 to 40 percent, the attorneys in this case - including Teresa Toriseva, Guy Bucci, George Sampson, Jonathan Cuneo, Daniel Cohen and Barry Hill - agreed to take less than 25 percent for their share, Wilson noted.

"These attorneys who have achieved this benefit for our citizens are entitled to the compensation normally awarded to those in our society who distinguish themselves in the work they perform," Wilson wrote. "[L]arge fees are a necessary and effective tool to deter wrongdoers. Collective action on behalf of large numbers of people is the only method of protecting consumers and making offenders pay when the value of each victim's claim is not large enough to cover the cost of litigation."

Wilson's decision drew criticism from Steve Cohen, executive director of the group West Virginia Citizens Against Lawsuit Abuse, a self-styled watchdog group that has targeted McGraw.

"Ultimately, he gave McGraw's hires their multimillion-dollar fee without any accountability," Cohen said. "The people of West Virginia are entitled to know what work contractors to Darrell McGraw did to earn $3.9 million. That's the issue."

Cohen claimed that McGraw using attorneys who had contributed to his re-election campaign to handle cases creates the appearance of "pay-to-play" - similar to the allegations surrounding Gov. Rod Blagojevich, D-Ill., - by putting the special assistant attorneys general in line to collect large fees from expensive cases.

"Judge Wilson's refusal to hold the attorney general and the private lawyers he hired accountable is just another example of the cozy good-old-boy network that holds West Virginia back," he said.

In August, Cohen appeared in Wilson's courtroom to voice his organization's objections to the proposed attorneys' fees. He demanded that the attorneys document the hours they worked, as well as their expenses, and suggested that their payment be pro-rated based on an hourly rate.

Although Cohen is not an attorney and has no standing in the case, Wilson acknowledged his objections in his opinion.

"Mr. Cohen is not a lawyer. Although he may have a few good ideas, he could not offer helpful legal arguments," Wilson wrote. "Most of his recommendations had to be rejected outright and, to the extent that I had the authority to act upon some, I ultimately found his requests to be without merit."

Lawyers in civil lawsuits usually work on a contingency basis, meaning they are not paid on an hourly basis, Wilson wrote. Instead, they are paid only if their clients receive money, and stand to lose any money they have put into expenses if they lose the case.

"In truth, and probably because he is employed by an organization that seems entirely too partisan when addressing any issue involving plaintiff's lawyers, [Cohen's] bias towards the Attorney General is so visible that it clouds his effort to deploy persuasive reasoning," Wilson wrote.

"It's too bad that Mr. Cohen's organization is so mean-spirited in its criticism of our legal system and its lawyers and judges, because it renders the nature of those claims more like an antagonistic ideology rather than a rational and substantive critique."

Cohen said this week that the judge was "effectively shooting the messenger for raising some very basic questions about the fee arrangement that enriches the lawyers."

'A small pool of people'

Chief Deputy Attorney General Fran Hughes dismissed Cohen's suggestion that the resolution of the case lacked accountability from the lawyers who handled it.

"We don't turn over a case and say, 'Go at it,'" she said. "This is very much a collaborative effort between the attorneys in our office and the private bar."

The consumer protection division of the Attorney General's Office has six lawyers and handles more than 10,000 complaints a year, she said. For massive, complex litigation like the credit card case, outside attorneys with special expertise are sometimes needed, she said.

The lawsuit, filed in Ohio County in 2003, alleged that MasterCard and Visa illegally forced retailers to accept only their debit cards in order to keep their credit card services. It also alleged that West Virginia consumers were harmed when the companies imposed larger fees for retailers on debit card transactions that required a signature as opposed to just a PIN number for identification, a cost that was passed on to customers regardless of the payment method they used.

Hughes said very few in-state attorneys could handle the credit card litigation, which required experience as a plaintiff's attorney, experience in antitrust and consumer cases, access to at least $500,000 in capital and an office with the internal infrastructure and technology to handle the massive number of documents produced. In addition, lawyers can't have previously represented either of the companies being sued.

"So really, you're down to a small pool of people," she said.

Wilson's opinion notes that the attorneys put up more than $230,000 of their own money, which they stood to lose had they lost the case.

"[A]t one point in the litigation, I came very close to dismissing it," Wilson wrote. "Only good legal work by ... attorneys representing the Attorney General prevented that from occurring."

The vast majority of the settlement - $11.6 million - went to the state treasury to fund a series of sales tax holidays on EnergyStar electronics and appliances, which meet tougher energy efficiency standards than required by the U.S. Department of Energy and the U.S. Environmental Protection Agency.

Last year, the EnergyStar tax holiday ran for a week in September, and consumers paid no sales tax on qualified products costing less than $2,500.

At the time, Gov. Joe Manchin said the holiday produced savings of up to $300,000 to West Virginians.

In 2009, the EnergyStar tax holiday will run for three months, and the tax-free spending ceiling will go up to $5,000, Hughes said.

Because the tax holidays required input from the governor and a new law enacted by the Legislature, all three branches of government have scrutinized the case, she said.

Hughes rejected Cohen's allegations of impropriety on the part of McGraw's office, and questioned Cohen's own commitment to transparency.

"For an organization that hides who donates to them, refuses to reveal who their contributors are, it's the height of hypocrisy for Mr. Cohen to raise the issue of accountability," she said.

Reach Andrew Clevenger at acleven...@wvgazette.com or 304-348-1723.